FELIX NWANERI reports 
Local govts on verge of extinction over lack of financial, administrative autonomy
FELIX NWANERI reports on how the joint accounts run by states and local governments have hindered the councils from meeting the two primary objectives spelt out in the Local Governments Reform of 1976, which are to promote participatory democracy and rapid socioeconomic development at the local level
Section 7(1) of the Nigerian Constitution guarantees a system of local government by democratically elected government councils. However, the second component of the section makes the establishment, structure, composition, finance and functions of the local governments dependent on state laws.
The constitution also makes it possible for state governments to cripple local governments financially by routing funds standing to their credit in the Federation Account through states/local governments’ joint accounts rather than directly to them.
This arrangement has over time, adversely affected the financial viability of the councils regarded as the government closest to the people as a greater percentage of the country’s population live in rural communities. It is against this backdrop that some stakeholders, have, over the years, called for the scrapping of the joint accounts to make way for financial autonomy for the country’s local government areas, numbering 774.
As expected, the states have continued resist this move. Under the 1999 Constitution (as amended), the federal and state governments are the federating units, while the local government areas are administrative units of the states. This, perhaps, explains why attempts by the Federal Government in the past to check use of funds in the joint accounts operated by the states and local governments as slush funds failed to yield desired results.
This is as the controversies over the operation of the joint accounts have refused to subside. Whereas it was argued at inception that the operation of the joint accounts was meant to bring even development to all parts of the country and to curb corruption, the arrangement has over time, adversely affected the financial viability of the councils as some state governments have continued to make inexplicable deductions from the accounts.
Section 162 (8) of the Constitution, which explains how the amount standing in the account should be distributed to the local governments in each state, provided that “the amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.”
Howeve r, this constitutional provision, rather than ensure fiscal responsibility, has provided a window for state governments to hold the councils hostage and make them their appendages. In practice, the operation of the joint accounts has denied local governments’ of financial autonomy. It should be noted that the state governments were not meant to be beneficiaries of the joint accounts, but to serve as trustees.
They are required to maintain the accounts for the benefit of the local governments by ensuring that funds allocated for the third tier of government are equitably and fairly shared among the councils, adhering strictly to constitutionally stipulated criteria.
Sadly, this constitutional provision has been continued to be breached as reports from across the country have it that some governors hand out only wage bills to the various council chairmen in their respective states, who in most cases, are appointed rather than elected as required by the law.
President Muhammadu Buhari confirmed the breach, when he recently accused some governors of unbridled ill-treatment of local governments’ administration and mismanagement of resources of the councils, causing what he termed stunted development experienced at the third tier of government and unfair labelling of his administration at the grassroots.
The President who bared his mind after he delivered a speech at an event hosted for members of the Senior Executive Course 44 (2022) of the National Institute for Policy and Strategic Studies (NIPSS) at the Presidential Villa, Abuja, penultimate week, cited a personal experience involving a governor he did not name. Buhari said it beats anyone’s imagination how some governors would collect money on behalf of local councils in their states, only to remit just half of such allocation to the chairman, who would further deplete the remittance in further pilfering of public resources.
The President’s comments followed the Course 44 presentation themed: “Strengthening local governance in Nigeria: Challenges, options and opportunities.” His words: “I found it necessary to digress after reading my speech and this digression is a result of my personal experience.
This is my personal experience. If the money from the Federation Account to the state is about N100 million, N50 million will be sent to the chairman, but he will sign that he received N100 million. The governor will pocket the balance and share it with whoever he wants to share it with. “And then the council chairman must see to how he will pay salaries and say to hell with development.
When he pays salaries, the balance he will put in his pocket. This is what’s happening. This is Nigeria. It’s a terrible thing; you cannot say the person who is doing this is not educated. He is a qualified lawyer, experienced and yet he participated in this type of corruption. “So, it’s a matter of conscience, whichever level we found ourselves.
As a leader, you sit here, with all the sacrifices the country is making by putting you through institutions and getting you ready to lead. The fundamental thing is personal integrity. May God help us.”
The President, who pledged that his administration will “painstakingly” consider the recommendations contained in the paper presented by the SEC 44 and implement them, added: “It is obvious that government cannot afford to pay lip service to the recommendations contained in this report. I assure you that the report will be treated with the seriousness and urgency it deserves.”
The Minister of State for Budget and National Planning, Clement Agba, had a day before the President’s submission, disclosed that 72 per cent of poor Nigerians live in the rural areas, which he according to him, have been abandoned by governors.
Speaking after the Federal Executive Council (FEC), Agba said the governors have abandoned the critical demographic, preferring to spend state resources on the capital cities instead.
NULGE backs Buhari
While some of the governors have dismissed Buhari’s claim, the President of the Nigeria Union of Local Government Employees (NULGE), Hakeem Ambali, said the President stated the obvious. He, however, urged the President to go beyond the statement and compel the governors under his party, the All Progressives Congress (APC), to sign the local government autonomy bill into law.
“He should go beyond that statement. He is the leader of the party, he should ask them to sign the autonomy into law; he is the leader of the governors,’’ Ambali admonished Buhari, adding that the development will encourage other governors from other parties to emulate them. He further stated: “Local government funds have been misapplied and misappropriated.
We want the President to have the good courage to take the bull by the horn. If the problems of poverty, insecurity, hopelessness and threat to the country needed to be addressed then, local governments must be granted full autonomy; that is the way to go.”
Ambali disclosed that a decision has been taken to vote for only a presidential candidate that declared support for local government autonomy. He noted: “We also want all the presidential candidates to be sincere with Nigerians and state their stance on local government autonomy.
Keeping mum will not help them and we have directed all our members to vote for any presidential candidate who openly declares support for local government autonomy and unfortunately, none of them has spoken on local government autonomy. “The President should lead by example, he should ask APC governors to support local government autonomy; that one can demonstrate that the APC is a progressive party.
Autonomy is the mindset of Mr. President and all of them must respect that, but, unfortunately, even Lagos voted against autonomy. If you are opposing local government autonomy, definitely, you have something to hide.”
Attempts to free councils from states
There is no doubt that successive administrations at the federal level in the present dispensation had made efforts to free the local councils from the grip of state governors.
The 7th National Assembly, for instance, through the House of Representatives, initiated a bill for an Act to amend not only provisions of Section 7 of the constitution, but also Section 162 in order to provide for independence and financial autonomy of the local governments.
Section 162 of the Constitution states inter-alia: “The Federation shall maintain a special account to be called ‘the Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”
The bill, sponsored by the then member representing Anaocha/ Njikoka/Dunukofia federal constituency of Anambra State, Hon. Uche Ekwunife (now senator representing Anambra Central Senatorial District) sought to amend the two sections to give the local governments’ independence and financial autonomy.
Ekwunife had in her presentation of the bill at that time, lamented the level of underdevelopment at the local governments across the country, owing to neglect by the various state governments.
She queried the need for the councils if the only exist to pay salaries. The bill passed second reading and was consequently committed to the House ad-hoc Committee on Constitution Review for further legislative action, but nothing meaningful came out of it. Similarly, a proposal by the then Peoples Democratic Party (PDP)- led Federal administration for the scrapping of the joint accounts also suffered similar fate.
The PDP administration at that time said it would not tolerate diversion of funds meant for the development of the grassroots. But the then main opposition party, Action Congress of Nigeria (ACN), advised then President Goodluck Jonathan to jettison the proposal.
The party argued that scrapping the accounts and allocating the councils’ share from the federation account directly to them would amount to making them federating units.
It was therefore not surprising when state Houses of Assembly voted against the proposal for financial autonomy for the local councils during the constitution amendment by the 7th National Assembly. It was another botched bid in 2017 during another amendment to the constitution. Whereas the Senate and House of Representatives voted in favour financial autonomy the local councils, the states Houses of Assembly turned down the proposal.
The Senate in particular, not only voted for alteration to section 162 of the Constitution to abrogate the state/local joint accounts and empower each local government to maintain its own “special account into which all allocations due to the council shall be directly paid from the Federation Account and from the government of the state,” but equally favoured a review the constitution to make democratic composition of local councils statutory.
This was aimed at ensuring taht any local government without elected officials would not get federal funding. While commendations trailed the position of the federal legislators then, some discerned minds, cautioned that it was not yet Uhuru given the rigorous amendment process to the Nigerian constitution.
The constitution requires approval of two/thirds of the state legislatures even after an amendment is passed by both chambers of the National Assembly. It was against this backdrop that that the proposed amendments as voted for by the National Assembly were sent to the 36 state Houses of Assembly for consideration and concurrence.
As envisaged, the amendment that would have freed the local councils from the grip of the states failed to scale the hurdle at the state level. Twenty-seven out of the 36 states of the federation rejected autonomy for the local governments. Only nine endorsed the proposal.
The states that gave yes votes were Ogun, Ondo, Niger, Benue, Plateau, Bauchi, Cross River, Kwara and Bayelsa. Then Speaker of the House of Representatives, Yakubu Dogara, who decried the rejection of autonomy for the councils said: “I will say that I am a bit disappointed because we would have delivered the long-awaited local government autonomy, but unfortunately, maybe our courage did not go that far.
“This is an exercise that is ongoing. I believe that as this one failed this time, maybe next time, as state Houses of Assembly are now independent, they would be able to extend this same independence to the local governments. We all know the benefits of freeing the three tiers of government.
So, please let us go ahead and do it.” Perhaps, only a few would have expected that the state legislatures will concur with their federal counterparts given the grip governors have on them.
Then National President of National Union of Local Government Employees (NULGE), Ibraheem Khaleel, who acknowledged that the proposal for autonomy for the councils would be a hard sale, had at a press conference, accused the governor of Imo State and his Edo State counterpart, Godwin Obaseki and and their party – All Progressives Congress (APC) of influencing members of their states Assembly to reject the bill.
He also accused governors of the north western states of influencing their states Assembly to defer the consideration. “I want to call on our governors to as a matter of respect for Nigerian citizens, who have spoken and aspired to have a local government system they can call their own, that will be free for them to participate democratically by electing their chairmen and councillors as and when due without undue influence from the government of the state.
“The idea behind establishing local government is by way of bringing governance closer to the people and providing a platform for everybody to participate at his own community level. But the governors have hijacked this tier of government for their own advantage,” Khaleel said.
Arguments for and against autonomy for LGs
The debate over autonomy for the councils has been a recurring decimal but some political stakeholders have always insisted that as a federal state, Nigeria has three tiers of government – federal, state and local – whose intergovernmental relations, which include political, financial, judicial and administrative, are established by the constitution.
They further maintained that each tier is required to operate within its area of jurisdiction and any action to the contrary is null and void to the extent of its inconsistency with the law.
This, they claimed, guarantees the autonomy of each tier. This positions, notwithstanding, there are other stakeholders, including NULGE, who have persistently called for urgent steps to be taken to save the local governments from extinction.
NULGE, in 2018, solicited the support of former President Olusegun Obasanjo (initiator of the 1976 Local Government Reform) to rescue the councils from governors. Obasanjo, who agreed with the union that state governments have incapacitated the councils, wondered whether the states could allow the federal government to do the same to them. His words: “There is no exception to this encroachment by states. Even though both are supposed to be separate tiers of government, with each having its roles and functions, that is not the case anymore. I wish I could help, but I am helpless.
As it is, I can only help you to shout and talk to the world. “I do not have any executive or legislative power. I am crippled. But we shall continue to talk until those who are reasonable among them change this attitude. I begin to wonder if they (states) can allow what they are doing to the local governments to be done to them.” Another former leader, who once voiced out against the structural defect at the local government level is ex-Military President, General Ibrahim Babangida.
He maintained that financial autonomy for the councils is the only way to the nation’s rapid development. Babangida maintained that development would be even and sustained if allocations meant for the various local governments are released to them directly although he added that they should be made to account for how the funds are spent by way of monitoring the various projects initiated and executed to maintain quality.
Effort by Buhari to liberate the councils
While Nigerians have continued to wonder how the seeming ambiguities in the constitution, which have aided the state governments to divert funds meant for the local councils would be tackled, what seemed a temporary relief came, when the APC-led Federal Government announced new order that made it compulsory for all local governments allocations to go straight to their respective bank accounts. The directive was aimed at ensuring that the joint account system only exists for the receipt of allocations from the federation account but not for disbursement.
The order was less than a year after President Buhari signed the Nigerian Financial Intelligence Unit (NFIU) Bill into law thus separating the agency from the Economic and Financial Crimes Commission (EFCC).
The decisions were contained in a guideline released by the NFIU after a meeting with officials of commercial banks. The notice was entitled: “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria, effective June 1, 2019.”
Though the directive was applauded, a legal hurdle was anticipated as Section 162 (8) of the 1999 Constitution (as amended) empowers the states to distribute allocation to councils “among the local government councils of that state on such terms and in such manner as may be prescribed by the House of Assembly of the state.” However, it was hope, when the Senate resolved to throw its weight behind financial guidelines introduced by the NFIU.
The Red Chamber’s resolution followed a motion by Senator Aliyu Sabi Abdullahi (APC, Niger North). Presenting his motion tagged “Guidelines to reduce vulnerabilities created by cash withdrawals from LG funds throughout Nigeria effective 1st June,” Abdullahi said issuance of the guidelines was prompted by threats by international financial watchdogs to sanction Nigeria because of financial abuse.
He added that the NFIU guidelines would reinforce the existence of local governments as an independent government established by the constitution at the grassroots level, with sovereign and elected officials. Then Deputy President of the Senate and chairman of the 8th Senate’s Committee on Constitution Review, Ike Ekweremadu, in his contribution to the debate on the motion, urged the upper legislative chamber to liaise with the NFIU to ensure that the guidelines do not contradict any part of the constitution.
Ekweremadu, who appealed to states Assembly to fast-track work on pending constitution amendments that would give legal backing to local government autonomy, however said the Senate’s position that financial institutions should support the implementation of the new guidelines contravenes Section 162(6 and 7) of the 1999 Constitution. While he acknowledged that governors may challenge the move in court, he said the best option is to amend the various sections of the constitution to grant full autonomy to local governments.
Some former governors in the Senate at the time, who supported the motion, said the reforms were overdue and will help free up funds for the development of local governments. But a former Plateau State governor, Jonah Jang, who faulted the motion, prayed that it should be withdrawn and the appropriate constitutional amendment put in place.
Jang’s prayer was however denied by his colleagues, who resolved to urge all financial institutions to support the implementation of the new guidelines. They also urged the 36 state governments to fully support the implementation of the guidelines, while calling on states Assembly to hasten constitutional amendment as regards local government autonomy.
Pending bid by 9th National Assembly
Despite the resolution by the 8th Senate and threats of sanctions by the NFIU, the states still maintained their firm grip on the finances of the councils. This explained why autonomy for the local governments was among the priorities, when the 9th National Assembly commenced another amendment to the 1999 Constitution
The constitution review committees of the federal legislature were headed by Ovie Omo-Agege (Senate) and Ahmed Idris Wase (House of Representatives) and it was not surprising that members of the Ahmad Lawan-led Senate and Femi Gbajabiamila-led House of Representatives voted overwhelmingly in support of the bill after a clause-by-clause consideration of the recommendations of the Joint Committee on the 1999 Constitution (5th Alteration) Bills, 2022.
Ninety-two senators voted in favour of the local government autonomy bill in the Red Chamber while 257 voted in support in the Green Chamber. The legislation was entitled: “Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999 to abrogate the state joint local government account and provide for a special account into which shall be paid all allocations due to local government councils from the Federation Account and from the government of the state; and for related matters.”
According to the bill, “each local government council is to create and maintain its own special account to be called Local Government Allocation Account into which all the allocations will be paid.” The bill also mandates each state to pay to local governments in its area of jurisdiction such proportion of its Internally Generated Revenue (IGR) on such terms and in such manner as may be prescribed by the state House of Assembly.
On administrative autonomy, the bill sought to allow local governments to conduct their own elections. A member of the House of Representatives, Farah Dagogo (Degema/Bonny Federal Constituency of Rivers State), who spoke on why he voted in favour of the bill, said autonomy is a sure way of allowing governance to get to the grassroots and that any lawmaker with a good conscience should have no reason to vote against the autonomy bill.
He added that citizens have been yearning for good governance and financial autonomy is an opportunity to deepen governance at the state and local government levels. “The yearnings by Nigerians for participatory and reflective government, financial autonomy for judiciary, state legislatures and the third tier of government will usher in a new era for all arms and organs of government to be truly responsive and responsible to the people,” he said.
While it was commendations for members of the National Assembly for passing the local government autonomy bill, the bill was sent to the states as twothird of the 36 states legislative Houses must be in concurrence with the National Assembly before any amendment to the constitution becomes effective.
The two bills, which were part of the 44 items approved by the Senate and House of Representatives, transmitted to the 36 State House of Assembly in March this year are still pending before the state legislature. But given experiences of the past, many stakeholders are doubtful if the governors will allow their respective Houses of Assembly vote in its favour although NULGE has vowed to resist any attempt to scuttle the passage of the bill..
However, as Nigerians wait to see how voting pans out in the states Assembly, the question is: Will the governors, through their legislative Houses, again succeed in stopping the proposed autonomy for the councils regarded as the government closest to the people.
